Guess who loses with Trump’s tax plan?
We need to applaud Donald Trump for his brutal honesty and mostly accurate tweet about the budget that the GOP-controlled Senate passed on Thursday: “Budget that just passed is a really big deal, especially in terms of what will be the biggest tax cut in U.S. history – MSM barely covered!” (The one inaccuracy is that the tax cut, while large, would not be the “biggest” ever. There have been a number of bigger tax cuts under presidents, from Lyndon Johnson to Ronald Reagan to Barack Obama.)
Still, Trump is correct that the GOP Senate passed this budget Thursday to pave the way for massive tax cuts. And Trump is also correct that the “MSM” — the mainstream media — has not covered this story the way it deserves.
But that’s where we part company. Trump wants the media to pat him on the back for the budget passing and for his proposed tax cuts. In contrast, I want the media to highlight for our fellow Americans that the budget passed by the GOP-controlled Senate would massively cut both Medicare and Medicaid in order to give the richest Americans a big, fat and unnecessary tax cut.
First, let’s look at the budget bill that the Republican Senate passed Thursday, which Trump is now publicly applauding. It would cut funding by $5 trillion over the next decade. And guess who would suffer the most from these cuts? Senior citizens, the poor and the disabled.
Here’s why: The GOP Senate budget calls for “$473 billion in cuts from Medicare over 10 years.” That would be a painful blow to the over 55 million Americans — including my own mother, and maybe yours, too — who depend on this very popular program to manage the cost of their health care.
Add to that, the GOP budget cuts over $1 trillion from Medicaid over the next decade. This is the very definition of cruel. Medicaid is a lifeline for over 70 million Americans — including the disabled, poor, children and, once again, senior citizens. In fact, seniors would arguably bear the brunt of the GOP’s cuts because Medicaid covers 60% of those in nursing homes. So some seniors may see both their Medicaid and Medicare benefits slashed.
And as Trump stated in his tweet, all of these proposed budget cuts are designed to give “the biggest tax cut in U.S. history.” And who will benefit from this gargantuan tax cut? Well, again, you don’t need to be an expert to know that when the Republicans are in control of government, the rich often benefit the most.
Experts confirm that is exactly what we would see based on the information now known about the GOP’s proposed cuts. Per Factcheck.org, a project of the Annenberg Public Policy Center of the University of Pennsylvania, “For the highest earners — those in the top 1 percent and top 0.1 percent — nearly all would see lower taxes.” In fact, according to Fackcheck.org, “Ninety percent of the top 1 percent — those earning about $900,000 and above in 2027 — would get a tax cut, averaging $234,050.” (It’s difficult to calculate the exact percentage of income that would be given just how wide the top tax bracket is.)
And another nonpartisan website, Politifact.com, found that 80% of the GOP tax cuts would benefit the top 1% by the 10th year of the plan.
So, what about the rest of us? Well, in 2018, middle-income households (those earning $50,000 to $90,000 a year) would receive a tax break on average of $660, or 1.2% of their after-tax income. While they would get an initial, tiny tax cut, the numbers would get worse over time: “By 2027, more than one of every four middle-income families would pay more in taxes.”
In other words, the wealthy would get the most benefits from the GOP plan, while the rest of us get crumbs or worse — a tax increase. But we all knew that. Indeed, a CNN poll released last week found that only 24% of Americans believe their families will benefit from Trump’s proposed tax plan. Meanwhile, 31% believe the bill will adversely affect them.
The good news is that the Senate budget passed Thursday is only a blueprint for tax reform — it’s not yet final. It now goes to the GOP-controlled House, where some changes might need to be made to address their concerns that the Senate bill would grow the deficit to unacceptable levels.
Recent reports indicate that House Republicans may simply adopt the Senate approved plan because they are feeling pressure not just from Trump but also from wealthy GOP donors, who have threatened to put up challengers against sitting congressmen if they fail to deliver.
The reality is that if American citizens don’t vocally oppose the proposed cuts to Medicare and Medicaid, why wouldn’t the GOP Congress simply approve it? As a reminder, the GOP’s attempt to repeal the Affordable Care Act and replace with a far inferior plan was only defeated because Americans — both on the left and the right — stood up and objected.
That is why those who oppose these cuts must speak up now. If not, then expect Medicare, Medicaid and other safety net programs to be slashed so that the GOP can give a tax cut that primarily benefits the top earners in America — the ones who need it least.
By Dean Obeidallah